The company has hired most of the team at a London-based smart contract startup.
Facebook has had a blockchain group since about a year ago, when veteran Facebook executive and former PayPal president David Marcus was tapped to lead the company’s efforts in the space. Now, they have made their first big move into the blockchain and crypto market by quietly hiring most of the team behind Chainspace, a smart contract platform registered in Gibraltar with offices in London.
Chainspace, founded last year by researchers in London, uses smart contracts to offer extensibility, rather than catering to specific applications such as Bitcoin for a currency, or certificate transparency for certificate verification. Unlike Ethereum, Chainspace’s sharded architecture allows for a ledger linearly scalable since only the nodes concerned with the transaction have to process it.
It was not an acquisition. Rather, Facebook proceeded with what in Silicon Valley is known as an acqui-hire, as reported earlier this week by Cheddar. It is “the clearest sign yet of Facebook’s ambition to be a big player in the nascent blockchain industry,” Cheddar reports.
Four of the five researchers behind Chainspace’s academic white paper are joining Facebook’s blockchain group. “Two of the white paper authors, Alberto Sonnino and George Danezis, already list their employment as blockchain researchers in Facebook’s London office on LinkedIn,” Cheddar writes.
“We’re excited to announced that the team is moving on to something new,” Chainspace website states now. And according to Cheddar, the startup will shut down now that Facebook has hired most of its employees. The “code and documentation will still be open source, and all previously published academic work remains available,” the company’s website mentions.
The fact that Facebook is investing in blockchain researchers in Europe is also telling. Victoria Adams at ConsenSys explains in a recent post on Medium that “Europe in many ways has led the development of blockchain adoption.” She continues: “The notable open source culture that permeates the continent lends itself well to the new dynamic of blockchain, and both private and public entities are actively involved in blockchain projects.”
Cheddar points out that, according to a Facebook spokesperson who declined to comment on specific hires, Facebook isn’t acquiring any of Chainspace’s technology. An earlier statement mentioned how “Like many other companies, Facebook is exploring ways to leverage the power of blockchain technology. This new small team is exploring many different applications. We don’t have anything further to share.”
Back in January last year, Facebook founder and CEO Mark Zuckerberg admitted in a post that he was looking at cryptocurrencies, encryption, and other decentralized computing approaches.
“There are important counter-trends to this — like encryption and cryptocurrency — that take power from centralized systems and put it back into people’s hands,” Zuckerberg wrote. “But they come with the risk of being harder to control. I’m interested to go deeper and study the positive and negative aspects of these technologies, and how best to use them in our services.”
Reporting on Facebook’s new blockchain group last May 2018, WIRED reported that Marcus, the group’s new lead, “is a blockchain believer: a payment specialist and former PayPal president, he has owned bitcoin since 2012, and has often spoken highly of its potential; he recently joined the board of cryptocurrency exchange Coinbase.”
“After nearly four unbelievably rewarding years leading Messenger, I have decided it was time for me to take on a new challenge,” Marcus said in a Facebook post. “I’m setting up a small group to explore how to best leverage Blockchain across Facebook, starting from scratch.”
Wired added that Marcus “loves this stuff” but previously “underlined that cryptocurrency payments were not coming to Facebook (and, specifically, to Messenger, which includes a payment feature) anytime soon: they were still too slow and expensive.”